Federal Court of Australia|1990-10-29|Before: Gummow J

Re Alan Bond; Peter Alexander Mitchell and Antony Gordon Oates v John Robert Sulan [1990] FCA 419; (1990) 8 ACLC 1273; 98 ALR 121 26 FCR 580 (29 October 1990)

Re: ALAN BOND; PETER ALEXANDER MITCHELL and ANTONY GORDON OATES

Companies - investigator appointed by National Companies and Securities Commission to conduct investigation into various companies - whether required to observe procedural fairness by according right to be heard to directors of these companies regarding any adverse conclusions or inferences reached by the investigator prior to making interim or final report.

Declarations - discretion - whether declaration should be made as to future events - prematurity - utility - form of declaration in such cases.

Federal Jurisdiction - whether investigator appointed under Part VII of Companies Act 1981 an officer of the Commonwealth - concurrent appointment under State Codes - accrued jurisdiction - Cross-Vesting legislation inapplicable.

Broken Hill Proprietary Co. Ltd v National Companies and Securities Commission (1986) 61 ALJR 124

Bond Corporation Holdings Ltd v Sulan (1990) 8 ACLC 562

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 64 ALJR 462

Kodak (Australasia) Pty Ltd v The Commonwealth (1988) 89 ATC 4,010

Courtice v Australian Electoral Commission (1990) 95 ALR 297

The Queen v Registrar of Companies for the Australian Capital Territory; Ex parte Boris Ganke (1960) 1 FLR 109

Webster v McIntosh [1980] FCA 128; (1980) 32 ALR 603

Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41

Re Cram; Ex parte N.S.W. Colliery Proprietors' Association Limited [1987] HCA 28; (1987) 163 CLR 117

Boath v Wyvill (1989) 85 ALR 621

Eatts v Dawson (1990) 21 FCR 166

Orison Pty Ltd v Strategic Minerals Corporation NL (1988) 81 ALR 183

Attorney-General (Cth) v State of Queensland (1990) 94 ALR 515

National Companies and Securities Commission v News Corporation Ltd [1984] HCA 29; (1984) 156 CLR 296

Testro Bros. Proprietary Limited v Tait [1963] HCA 29; (1963) 109 CLR 353 In re Pergamon Press Ltd (1971) Ch 388

Maxwell v Department of Trade and Industry (1974) QB 523

The University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1

The Trustees of Church Property of the Diocese of Newcastle v Ebbeck [1960] HCA 88; (1960) 104 CLR 394

F v West Berkshire Health Authority (1989) 2 All ER 545

Inland Revenue Commissioners v Rossminster Ltd [1979] UKHL 5; (1980) AC 952

by Messrs Allen Allen and Hemsley.

Counsel and solicitors Miss M.J. Beazley QC and

by Mr B.A. Given, solicitor for the

Corporate Affairs Commission.

Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

This is the final hearing of a matter commenced by application filed 15 October 1990. In the application, both injunctive and declaratory relief were sought, but at the final hearing this was narrowed to a declaration in the following terms:

The Applicants have a right to be heard by the

Respondent in respect of any adverse conclusions

or adverse inferences reached by the Respondent

concerning or relating to the Applicants or any of

them prior to the making of any interim or final

report of the investigation arranged pursuant to a

direction by the Ministerial Council for Companies

and Securities made under sub- section 291 (3) of

inter alia the Companies Act 1981 and styled the

"Investigation into the Affairs of Bond

Corporation Holdings Limited", containing any such

conclusions or inferences.

2. The essential facts are not in dispute. The National Companies and Securities Commission ("the NCSC") is established as a body corporate by s. 10 of the National Companies and Securities Commission Act 1979 ("the NCSC Act"). Section 5 of the NCSC Act provides that in the performance of a function or the exercise of a power under an Act of the Parliament, the NCSC represents the Crown in right of the Commonwealth, but that nothing in that statute prevents a State Act (which is defined, curiously, as including a Northern Territory enactment) from providing that, in the performance of a function or the exercise of a power thereunder, the NCSC is to represent the Crown in the right of the State or in right of the Northern Territory. Further, s. 6 states that in addition to such functions and powers as are conferred upon it by a statute that is a law of a kind referred to in s. 122 of the Constitution (the Territories power) the Commission shall perform any functions and may exercise any powers that are conferred or expressed to be conferred upon it by any "State Act". The intention of the NCSC Act is that the capacity of the Commission to exercise its powers or perform its functions, whether conferred by Commonwealth law or conferred or expressed to be conferred by State law, is derived from the NCSC Act itself, that is to say from a law of the Commonwealth: Broken Hill Proprietary Co. Ltd v National Companies and Securities Commission (1986) 61 ALJR 124 at 126 per Dawson J.

3. The Ministerial Council for Companies and Securities (the "Ministerial Council") is a body established by Part VII of an agreement between the Commonwealth and the States made 22 December 1978 and set out in the Schedule to the NCSC Act. Section 7 of the NCSC Act obliges the NCSC to comply with directions with respect to the performance of any of the functions or the exercise of any of the powers of the NCSC, being directions given, inter alia, by the Ministerial Council.

4. On 2 March 1990, by an instrument in writing, the Ministerial Council, acting pursuant to sub-s. 291 (3) of the Companies (Western Australia) Code ("the Western Australian Code") directed the NCSC to arrange for an investigation into the affairs of Bond Corporation Holdings Limited, a company incorporated in that State. By instrument under its common seal, dated 21 March 1990, the NCSC appointed the respondent as Inspector to carry out that investigation. Proceedings were then instituted by Bond Corporation Holdings Limited in the Supreme Court of Western Australia, and on 11 May 1990, Ipp J. delivered a judgment reported as Bond Corporation Holdings Ltd v Sulan (1990) 8 ACLC 562, in which he declared invalid part of the direction of 2 March 1990.

5. However, on 28 May 1990, the Ministerial Council, acting pursuant to sub-s. 291 (3) of the Companies Act 1981 ("the Companies Act"), and the corresponding provisions in the Codes of the six States and Northern Territory, directed the NCSC to arrange an investigation into all the affairs from 1 January 1986 of a scheduled list of companies. The list comprises 183 companies incorporated in Western Australia, 47 incorporated in the Australian Capital Territory under the Companies Act, 94 incorporated in New South Wales, 24 in Victoria, 24 in Queensland, 5 in the Northern Territory and 1 in South Australia. On 30 May 1990, the NCSC appointed the respondent as inspector to carry out an investigation on the terms and conditions determined by the NCSC and agreed to by the respondent.

6. The three applicants, Messrs Bond, Mitchell and Oates, were, prior to their recent resignations, executive directors of Bond Corporation Holdings Limited and directors of many of the companies with respect to the activities of which the respondent is concerned in his investigation.

7. The respondent has proceeded under the balance of the appointment by the NCSC on 21 March 1990, and under the second appointment of 30 May 1990. Whilst the distinction is drawn in the second appointment by the NCSC, and in the directions by the Ministerial Council, between distinct sources of authority in Commonwealth and State legislation, the apparent intention has been that in a practical sense, the respondent proceed with the one investigation. This he has done. The respondent has examined approximately 50 witnesses, including Mr Bond and Mr Mitchell. The examination of Mr Oates was due to commence on the day of the final hearing of these proceedings in this Court, 22 October 1990. The seat of the investigation has been in Adelaide. By 17 October 1990, the evidence extended over some 5,400 pages of transcript, and a body of documents exceeding 220,000 sheets had been gathered at the Adelaide office of the respondent.

8. It appears that from time to time the Ministerial Council has directed the respondent to produce interim reports, but the NCSC has not seen fit to send copies of the whole or any part thereof to the registered office of any of the corporations to which the reports have related: sub-s. 306 (1) of the Companies Act, and the corresponding provisions of the Code. The next meeting of the Ministerial Council will be held on 13 December 1990, and the NCSC has directed the respondent to have a report available to the NCSC by 6 December 1990 to enable consideration of it by the NCSC in advance of the meeting on 13 December. It has been suggested by the NCSC to the respondent that his paper consist of four pages, and cover topics including "general issues" (such matters as jurisdiction and legal professional privilege) and "offences".

9. As will be apparent from the nature of the declaratory relief now sought by the applicants, they are concerned as to the observance by the respondent of the rules of natural justice, (or what is better described as the requirements of procedural fairness: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 64 ALJR 462 at 482 per Deane J.), in relation to any adverse conclusions or adverse inferences he may reach concerning or relating to them, before they are set down in any interim or final report of his investigation.

10. There was no dispute as to the jurisdiction of this Court, under the law as it presently stands, to grant such relief. But the matter is not free from difficulty, and I should deal with it. The applicant propounded jurisdiction in terms of the Jurisdiction of Courts (Cross-Vesting) Act 1987 ("the Cross-Vesting Act"), but that Act and the corresponding State legislation does not operate so as to invest this Court with federal jurisdiction: Kodak (Australasia) Pty Ltd v The Commonwealth (1988) 89 ATC 4,010; Courtice v Australian Electoral Commission (1990) 95 ALR 297.

11. As I have said, the capacity of the NCSC to exercise its powers or perform its functions is derived from a law of the Commonwealth, the NCSC Act. Further, at least insofar as it appointed the respondent in compliance with a direction pursuant to s. 291 of the Companies Act, as regards the 47 companies incorporated in the Australian Capital Territory, the NCSC represented the Crown in right of the Commonwealth; s. 5 of the NCSC Act has that result. Therefore, the respondent is an officer of the Commonwealth so as to attract the jurisdiction of this Court under s. 39B of the Judiciary Act 1903. This would nonetheless be so because the 47 companies in question were incorporated in the Australian Capital Territory: The Queen v Registrar of Companies for the Australian Capital Territory; Ex parte Boris Ganke (1960) 1 FLR 109 at 111. The Companies Act has as its object the making of provision for the government of the Australian Capital Territory in relation to company law: s. 3. Nevertheless, it is a law of the Commonwealth: Webster v McIntosh [1980] FCA 128; (1980) 32 ALR 603 at 607, per Brennan J.; Breavington v Godleman [1988] HCA 40; (1988) 169 CLR 41 at 66.

12. The respondent would remain a federal officer in respect of all his powers and functions unless perhaps the NCSC Act evinced an intention that in the exercise of powers derived from the State statutes, he functioned in some different capacity. The High Court left open that question in Re Cram; Ex parte N.S.W. Colliery Proprietors' Association Limited [1987] HCA 28; (1987) 163 CLR 117 at 128-129, a joint judgment of all members of the Court. A related question has arisen in this Court in litigation arising from concurrent federal and State Royal Commissions to inquire into aboriginal deaths in police custody: Boath v Wyvill (1989) 85 ALR 621; Eatts v Dawson (1990) 21 FCR 166. But as these authorities indicate, questions as to the exercise of powers and functions derived from State law and exercised by the respondent in a distinct capacity, would be part of the one "matter" in the technical sense, there being truly a single controversy.

13. Accordingly, the jurisdiction of the Court, insofar as injunctive relief is claimed in the application, is attracted by s. 39B of the Judiciary Act; in relation to a matter in which this Court has original jurisdiction, it may make binding declarations of right, as provided by s. 21 of the Federal Court of Australia Act 1976, and in this regard, no distinction is drawn between the accrued and the primary jurisdiction of the Court: Orison Pty Ltd v Strategic Minerals Corporation NL (1988) 81 ALR 183 at 191. Insofar as the respondent is to be seen as exercising functions reposed in him by State law, there would be a foundation in the accrued jurisdiction for the declaratory relief now sought against him: Attorney-General (Cth) v State of Queensland (1990) 94 ALR 515 at 536. It follows from what I have said as to the attraction of jurisdiction under s. 39B, that in a State Supreme Court this would be a "special federal matter" within the meaning of the definition of sub-s. 3 (1) of the Cross-Vesting Act.

14. Provision is made for special investigations in Part VII of the Companies Act and in Part VII of the Codes. The provisions of Part VII of particular significance for the present case were summarised (with reference to the corresponding provisions in the Western Australian Code) by Ipp J. in Bond Corporation Holdings Ltd v Sulan, supra at 566-567:

"Under sec. 296 (7), an officer is not excused

from answering a question put to him by an

inspector on the ground that the answer might tend

to incriminate him. Section 298 (6) entitles the

(NCSC) to give a copy of a written record, made of

an examination by an inspector, to a legal

practitioner who is acting for a person who is

conducting or contemplating criminal or civil

proceedings in respect of any matters into which

an investigation has been or is being made by an

inspector. Section 299 provides that subject to

certain limited exceptions, any statements made at

an examination of a person by an inspector are

admissible in evidence in any criminal or civil

proceedings against the person. Section 305 (1)

provides for the making of (interim and final)

reports by an inspector to the (NCSC) as to 'his

opinion on or in relation to the affairs of the

corporation or corporations that he has

investigated, together with the facts on which his

opinion is based'. Under sec. 306 (6) the

Ministerial Council and the Minister may cause to

be printed and published the whole or any part of

a report. Section 306 (8) provides that if from a

report or from the record of an examination it

appears to the (NCSC) that an offence may have

been committed by a person and that a prosecution

ought to be instituted, the (NCSC) shall cause a

prosecution to be instituted and prosecuted.

Section 306 (11) provides that, if from a report

or from the record of an examination, the (NCSC)

is of the opinion that proceedings ought in the

public interest to be brought by a corporation for

the recovery of damages or for the recovery of

property of the corporation, the (NCSC) may cause

proceedings to be brought in the name of the

corporation. In terms of sec. 306 (12), a report

by an inspector is admissible in civil proceedings

as evidence of any facts or matters stated in the

report to have been found to exist by the

inspector. Section 312 provides that where a

report of an investigation has been made by an

inspector, application may be made by the (NCSC)

for the winding up of the corporation.

It can be seen therefore that the Code provides

for a structured scheme of considerable detail

whereby, prior to the winding up of a company, the

Ministerial Council is empowered to direct the

(NCSC) to carry out an investigation into the

affairs or particular affairs of a company. The

(NCSC) may appoint an inspector to carry out that

investigation and the inspector is given very wide

powers. A direction that an investigation be made

into its affairs is a matter of the most serious

moment to a company, particularly having regard to

the consequences that may flow from a critical or

adverse report by an inspector."

See also the analysis of Part VII investigations by Gibbs C.J. in National Companies and Securities Commission v News Corporation Ltd ("the NCSC Case") [1984] HCA 29; (1984) 156 CLR 296 at 310-311.

15. There has been a detailed correspondence between the respondent and the solicitors for the applicants. The evidence includes letters passing between them dated 10 August 1990, 7 September 1990, 24 September 1990, 27 September 1990, 2 October 1990 (an 11 page letter from the solicitors for the applicants), no less than three letters each dated 9 October 1990, and letters dated 11 and 12 October 1990.

16. The parties to that correspondence canvassed in some detail a number of the well-known authorities dealing with the application in this field of the requirements of procedural fairness. They included Testro Bros. Proprietary Limited v Tait ("the Testro Case") [1963] HCA 29; (1963) 109 CLR 353; In re Pergamon Press Ltd (1971) Ch 388; Maxwell v Department of Trade and Industry (1974) QB 523 and the NCSC Case, supra.

17. On p 9 of the letter from the solicitors for the applicants dated 2 October 1990, after referring to various authorities, it was said:

". . . (B)ecause an investigation under Part VII

has a direct effect on the rights of examinees

(for example, by the removal of the privilege

against self incrimination) and because there will

be publication (at least of a limited kind) of a

report which may contain findings adverse to (the

applicants), thereby affecting their reputation

and exposing them to the risk of further legal

proceedings, natural justice must be afforded to

them. Moreover, in those circumstances, the level

of natural justice required is extensive."

The letter then proceeded (on p 10) to assert in the applicants the right:

"(t)o be informed of any adverse conclusions or

adverse inferences drawn from any evidence, and of

all evidence giving rise to such conclusions and

inferences, before any report is made, or evidence

in any way published or released, containing such

conclusions or inferences. This right would entail

the client in question being properly informed of

the evidentiary basis for any such conclusion or

inferences by being provided with copies of the

relevant documentary evidence and transcripts of

all relevant oral evidence; . . ."

The letter concluded by requesting, by 8 October 1990, the provision by the respondent of (a) "particulars of any such views or conclusions which you have, by then, reached in respect of any of our clients", and (b) an undertaking "to provide particulars of any such views or conclusions which you may in future reach at the time at which they are reached".

18. In his response, being the first letter dated 9 October 1990, the respondent said:

"So far, I have endeavoured to ensure that,

wherever appropriate, the effect of material

evidence touching the conduct or evidence of an

examinee is put to that examinee to enable him to

respond. That practice should not be confused

with the formation of views or findings or the

formulation of allegations.

It follows that I do not accept that in all the

circumstances of the inquiry I am required to

provide the particulars requested in paragraph (a)

(on the last page) of your letter . . .

More particularly, as to your request, in

paragraph (b) (on the last page) of your letter,

that I undertake to provide particulars of any

tentative views or conclusions adverse to one or

other of your clients as and when I may form them,

I consider that it would be inappropriate to give

such a broad undertaking as to future conduct. In

that regard, I observe, first, that the nature of

the particulars (if any) required to be given to a

witness will vary with all the circumstances and

the authorities caution to that effect. Secondly,

there may be good reasons why a tentative

conclusion should not be put to a witness - some

of which were identified in NCSC v News

Corporation by Mason, Wilson and Dawson JJ. 323-324."

The respondent went on, with reference to the judgment of Gibbs C.J. in the same case, to point out that the rules of natural justice may vary from case to case, although each case may be conducted before one and the same tribunal.

19. In their letter of 9 October 1990, the solicitors for the applicant asked the respondent to state:

". . . (W)hether in the event that you form

tentative conclusions adverse to any of our

clients you will afford him or them (as the case

may be) an opportunity of refuting or answering

those conclusions before making any interim or

final report?"

In his letter of reply, of the same date, the respondent said:

"When I have gathered sufficient material to

permit me to reach tentative conclusions as to the

findings I might make, I will then give

consideration as to the extent to which (if at

all) those findings are adverse to your clients

such that your clients should be afforded an

opportunity to make further representations to me or to

adduce further evidence in the way that you propose.

At that time, I will take into account the

nature of the tentative findings, the extent to

which your clients have had a prior opportunity to

address the matters the subject of such findings,

either on examination or otherwise, and all of the

other circumstances of the inquiry as they then appear."

This drew a response from the applicants' solicitors dated 11 October 1990 which identified "one matter of critical importance" requiring immediate clarification, namely:

". . . (O)ur clients must have the right to be

heard in respect of any adverse views or conclusions

which you draw about them or their conduct before those

views or conclusions are disclosed to any person outside

your investigation team."

The letter concluded by seeking the provision on the next day, 12 October 1990, of "an unequivocal written assurance" to that effect. In his response of 12 October 1990, the respondent said:

"I have already made it clear that it would be

inappropriate and wrong of me to give any

assurance or undertaking of the kind you seek.

Save for exceptional circumstances, I can say

that your clients, either on examination or

otherwise, will have an opportunity to be heard

in respect of material evidence adverse to them.

That opportunity would be afforded to them prior

to the publication of my final report.

In conclusion, whilst I have at all times

acknowledged the importance of the present

exchange of correspondence, in my view I have put

the matter as clearly as it can be put. I

consider that any further correspondence on this

subject, at this time, is liable to be disruptive

of the work of my investigation.

If your clients are dissatisfied with my

response, I invite them, forthwith, to pursue such

remedies as may be open to them. I shall

endeavour to facilitate a prompt resolution of

such proceedings."

20. As will be apparent, the present proceedings were instituted very shortly thereafter. Senior counsel for the respondent has indicated to the Court that the reference in her client's letter of 12 October 1990 to the affording of an opportunity prior to the publication of his final report is to be read as extending to any interim report.

21. There was a measure of agreement in the submissions of counsel that, as many authorities show, the content of the requirements of procedural fairness must depend upon the nature and circumstances of the inquiry, including the subject matter that is being dealt with and the consequences, in a legal and practical sense, of any adverse conclusions reached in the inquiry. In that regard, counsel for the applicants emphasised that, given the serious consequences that may flow from a Part VII investigation (summarised in the passage I have set out from the judgment of Ipp J.), questions of procedural fairness should be answered more favourably to his clients than would be the case if the investigation were based upon the less stringent legislation considered by the High Court in the Testro Case and by the English Court of Appeal in the two decisions I have mentioned, which arose out of the investigation of the affairs of Pergamon Press Limited. There is some force in what was submitted, if one compares the summary by Ipp J. of Part VII, with what was said by McTiernan, Taylor and Owen JJ. regarding the investigations under Part VI Division 4 of the Companies Act 1961 (Vic.) - see 109 CLR at 364-365 - and by Lord Denning M.R. of the Companies Act 1948 (U.K.) - see (1971) Ch 388 at 399.

22. In the lastmentioned case, In re Pergamon Press Ltd, supra at 407, after referring to the consequences for a director or officer from an adverse report furnished under the 1948 legislation, Buckley L.J. said:

"If inspectors are disposed to report on the

conduct of anyone in such a way that he may in

consequence be proceeded against, either in

criminal or civil proceedings, the inspector

should give him, if he has not already had it,

such information of the complaint or criticism

which they make of him in their report and of

their reasons for doing so, including such

information as to the nature and effect of the

evidence which disposes them so to report, as is

necessary to give the person concerned a fair

opportunity of dealing with the matter, and they

should give him such an opportunity."

(Emphasis supplied).

23. In the next case, Maxwell v Department of Trade and Industry, supra, the English Court of Appeal held that when inspectors were holding an inquiry under s. 165 of the 1948 statute, it was sufficient for them to put to witnesses what had been said against them by other persons or in documents to enable them to deal with those criticisms in the course of the inquiry; it was not necessary for the inspectors to put their tentative conclusions to the witnesses in order to give them an opportunity to refute them. The Master of the Rolls rejected the submission that after coming to a tentative adverse conclusion, it was necessary for the inspectors to put the substance of that conclusion to the witnesses concerned. His Lordship said, supra at 534:

"What will be the response of those witnesses?

They will at once want to refute the tentative

conclusions by calling other witnesses, or by

asking for further investigations. In short, the

inquiry will develop into a series of minor trials

in which a witness will be accused of misconduct

and seek to answer it. That would hold up the

inquiry indefinitely. I do not think it is

necessary. It is sufficient for the inspectors to

put the points to the witnesses as and when they

come in the first place. After hearing the

evidence, the inspectors have to come to their

conclusions. These need not be tentative in the

least. They can be final and definite, ready for

their report."

Orr L.J., supra at 537, discussed the passage in the earlier judgment of Buckley L.J., including the passage which I have emphasised in the earlier extract. His Lordship said that the emphasised words seemed to imply that it was sufficient if the witness has been given the relevant information as it emerged before the inspectors formed their tentative conclusion.

24. The applicants submitted that these authorities had weighed too heavily with the respondent in formulating the procedure proposed by him in the passages I have extracted from his two letters of 9 October 1990 and in his final letter, that of 12 October 1990. The applicants were apprehensive that the respondent was not excluding, and was indeed leaving open, the possibility that in some circumstances, after he had reached tentative findings adverse to one or more of them, he might not afford an opportunity to make further representations or to adduce further evidence.

25. As Gibbs C.J. pointed out in the NCSC Case, supra at 312, 316, the application of the rules of natural justice may vary from case to case, even though the same power is being exercised. The respondent has been well aware of this, as is apparent from his reference to the judgment of Gibbs C.J., in his first letter of 9 October 1990. In the setting of the present case, given the conduct of the investigation to date, the Court certainly should approach the 2matter on the footing that the investigator will provide what Sach L.J. "fair play in action": see In re Pergamon Press Ltd, supra at 405, and note also the remarks to like effect by Brennan J. in the NCSC Case, supra at 326.

26. In his first letter of 9 October 1990, the respondent pointed out, with reference to observations by Mason, Wilson and Dawson JJ. in their joint judgment in the NCSC Case, supra at 323-324, that there may be instances where (and it was not suggested before me that the present investigation yet provides one of them) to proceed as counsel for the applicants would have the investigator proceed, might oblige him, quite inadvisedly, to disclose his hand prematurely. Other examples were suggested in argument by counsel for the respondent.

27. I appreciate the significant impact an investigation under Part VII may have upon the interests and standing of the applicants. It would not be correct to read passages in the English cases, dealing as they do with different legislation and different circumstances, as necessarily controlling the procedure to be adopted by the respondent in the present investigation. But in my view, the respondent has not done so. If the correspondence be given a fair reading, the plain result is that he has not fallen into such an error. Further, at this stage of the investigation, it would be quite wrong for the respondent to circumscribe his future conduct by giving the unqualified undertaking sought of him in the letter of 11 October 1990.

28. It was not denied that the Court had power to make a declaration in the form sought by the applicants. The question rather was one of the exercise of discretion. In my view, the applicants have not made out their case for a declaration. There are several reasons for that conclusion, and they are inter-related.

29. It would be an exaggeration to describe what is sought by the applicants as a bare declaration in the air; cf. Maxwell v Department of Trade and Industry, supra at 536, 539, 542. In The University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1 at 10, Gibbs J. referred to cases in which a declaration has been refused "because it was claimed in relation to circumstances that had not occurred and might never happen". Nevertheless, some caution should be exercised against taking too literally what his Honour there said. For example, in construing settlements and testamentary instruments, the courts for long have determined questions as to future interests that will arise in events that have not yet happened. The position is, with respect, more aptly put by Dixon C.J. in The Trustees of Church Property of the Diocese of Newcastle v Ebbeck [1960] HCA 88; (1960) 104 CLR 394 at 400-401. The Chief Justice said:

"The modern tendency to decide the effect of

limitations of future interests before the

question arises might be thought to have suffered

some set back by the course taken in Davies v

Perpetual Trustee Co. (1959) AC 439, of allowing

an appeal from an order forty years old made

concerning a future interest at a time when a

somewhat different understanding obtained of the

principles upon which that order was based. In

any case it is still the general prima facie rule

that questions about future interests that will

arise in events that have not yet happened and

need not necessarily occur are not decided unless

beneficiaries are hampered in their practical

affairs in some significant respect by the

uncertainty or some other positive ground exists

for an anticipatory decree or order. There are

cases where it is clear enough that eventually a

question under a limitation must arise but until

the events happen it cannot presently be known who

will be interested under the rival interpretations

or the contested operation of the limitation.

That is a reason for refusing to decide the question

until the events happen. But it is not this case."

(Emphasis supplied).

Later, Jacobs J., who would have been not unfamiliar with the course of litigation in Davies' Case, said that a declaration should not be made if it amounted to a conclusion upon a hypothetical or assumed state of facts which was then relied upon as enunciating or declaring a rule or obligation of apparently general application: The University of New South Wales v Moorhouse, supra at 24. I turn to consider those precepts in relation to the present proceedings.

30. In the circumstances of the present case, as I have described them, there can be little true utility and some scope for mischief if a declaration be made which would have the effect of closing or limiting the authority of the respondent as to the procedures he must adopt in circumstances not all of which are yet present. This is particularly so because what should be done, as regards adverse conclusions or inferences, prior to the making of any report, may vary from witness to witness; cf. F v West Berkshire Health Authority (1989) 2 All ER 545 at 571-572 per Lord Goff of Chieveley.

31. The declaration sought by the applicants would be too wide because it asserts in absolute terms a right to be heard which, in a given case not yet established, may not be required to give procedural fairness to the applicant or applicants in question. No other formulation was proffered for the applicants at the hearing. And wisely so, because to cope with the various possibilities, it would be necessary to produce a declaration with an unwieldy text which might itself then be productive only of further debate as various events came to pass. Further, and this is essentially the primary point, no case has been shown for an apprehended failure by the respondent to observe his responsibilities.

32. A declaration is a final not an interlocutory remedy: Inland Revenue Commissioners v Rossminster Ltd [1979] UKHL 5; (1980) AC 952 at 1000, 1007, 1014-1015, 1027. In a real sense, the applicants seek declaratory relief quia timet. That of itself is not a reason for declining relief. But I have not been satisfied that the course proposed by the respondent in the correspondence, particularly in his two letters of 9 October 1990 and in his letter of 12 October 1990, would entail any failure to observe the requirements of procedural fairness owed to the applicants.

33. The application should be dismissed with costs.

Court of Australia Act 1976

Companies and Securities Commission Act 1979

Courts (Cross-Vesting) Act 1987

(Vic.) Companies (Western Australia) Code Companies Act 1948

Court of Australia Act 1976

Companies and Securities Commission Act 1979

Courts (Cross-Vesting) Act 1987

(Vic.) Companies (Western Australia) Code Companies Act 1948

Court of Australia Act 1976

Companies and Securities Commission Act 1979

Courts (Cross-Vesting) Act 1987

(Vic.) Companies (Western Australia) Code Companies Act 1948

Court of Australia Act 1976

Companies and Securities Commission Act 1979

Courts (Cross-Vesting) Act 1987

(Vic.) Companies (Western Australia) Code Companies Act 1948

Re Alan Bond; Peter Alexander Mitchell and Antony Gordon Oates v John Robert Sulan [1990] FCA 419;

At a glance

Court

Decision date

Before

Source

Judgment (91 paragraphs)

Re Alan Bond; Peter Alexander Mitchell and Antony Gordon Oates v John Robert Sulan [1990] FCA 419; (1990) 8 ACLC 1273; 98 ALR 121 26 FCR 580 (29 October 1990)

Parties

Legislation Cited (20)

Cases Cited (15)